Coinbase has proposed the creation of a new cryptocurrency oversight body
The head of US bitcoin exchange Coinbase, Brian Armstrong, has proposed that US authorities form an agency with authority over digital assets at the federal level.
The initiative comes after the exchange refused to launch cryptocurrency accounts due to claims from the SEC. Earlier, the regulator had warned Coinbase of possible prosecution.
The conflict prompted the company to draft a federal regulatory framework for consideration by US lawmakers.
Coinbase's finalised plan proposes a radical overhaul of US financial regulation and consists of four main areas:
Regulating digital assets under a new framework - the existing system does not work for decentralised networks. The new agency would support innovation.
Designation of a single regulator - a new registration process for marketplaces of digital assets should be established for the agency. A dedicated self-regulatory organisation should also be established.
Empower and protect digital asset owners, including against fraud and market manipulation.
Promoting interoperability and fair competition - Marketplaces of digital assets should interoperate with products and services in the crypto-economy. This is a condition for fair competition, responsible innovation and support for developers.
The proposals are based on feedback after more than 75 meetings with lawmakers, industry and academia.
"We have come to the conclusion that it does not make sense to transform a particular regulator because of the specifics of the technology behind digital assets," Coinbase policy director Faryar Shirzad said, according to The Block.
According to the top executive, the proposals will be sent to the SEC for review. Shirzad explained that they do not apply to bitcoin and Ethereum (the Commission has not deemed them securities) and truly decentralised organisations. In the latter case, "there is nothing to regulate", he added.
Coinbase has offered to join the discussion regarding the proposals on GitHub.
Recall that the September speech by SEC head Gary Gensler to the Senate was described as announcing a "crusade" against bitcoin exchanges. In it, he vowed to crack down on platforms that listed unregistered securities.
A month earlier, the official had called for a dialogue with cryptocurrency exchanges.
In October, Gensler said the Commission had no plans to ban cryptocurrencies, citing that it was the prerogative of Congress. He had earlier confirmed the terms under which the SEC would approve a bitcoin-ETF.
The media recently reported that Joe Biden's administration is considering issuing an executive order to federal agencies that would require them to examine the crypto industry and make appropriate oversight recommendations.